Correlation Between Great Sun and ZYF Lopsking

Can any of the company-specific risk be diversified away by investing in both Great Sun and ZYF Lopsking at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Great Sun and ZYF Lopsking into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Great Sun Foods Co and ZYF Lopsking Aluminum, you can compare the effects of market volatilities on Great Sun and ZYF Lopsking and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Great Sun with a short position of ZYF Lopsking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great Sun and ZYF Lopsking.

Diversification Opportunities for Great Sun and ZYF Lopsking

0.8

Correlation Coefficient

Great Sun  ZYF Lopsking

Very poor diversification

The 3 months correlation between Great and ZYF is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Great Sun Foods Co and ZYF Lopsking Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZYF Lopsking Aluminum and Great Sun is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Great Sun Foods Co are associated (or correlated) with ZYF Lopsking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZYF Lopsking Aluminum has no effect on the direction of Great Sun i.e., Great Sun and ZYF Lopsking go up and down completely randomly.

Pair Corralation between Great Sun and ZYF Lopsking

Assuming the 90 days trading horizon Great Sun Foods Co is expected to generate 1.57 times more return on investment than ZYF Lopsking. However, Great Sun is 1.57 times more volatile than ZYF Lopsking Aluminum. It trades about 0.05 of its potential returns per unit of risk. ZYF Lopsking Aluminum is currently generating about 0.06 per unit of risk. If you would invest  454.00  in Great Sun Foods Co on December 23, 2024 and sell it today you would earn a total of  34.00  from holding Great Sun Foods Co or generate 7.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Great Sun Foods Co  vs.  ZYF Lopsking Aluminum

Great Sun Foods

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Great Sun Foods Co are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Great Sun may actually be approaching a critical reversion point that can send shares even higher in April 2025.

ZYF Lopsking Aluminum

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ZYF Lopsking Aluminum are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, ZYF Lopsking may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Great Sun and ZYF Lopsking

The main advantage of trading using opposite Great Sun and ZYF Lopsking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great Sun position performs unexpectedly, ZYF Lopsking can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in ZYF Lopsking will offset losses from the drop in ZYF Lopsking's long position.

The idea behind Great Sun Foods Co and ZYF Lopsking Aluminum pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.